June's Producer Price Index (PPI) report confirmed inflation stayed near the FED's target of 2%. June’s PPI and Core CPI reports both confirmed inflation hovering around the FED’s 2% target at 1.7% and 2.3%, respectively. Nonetheless, global trade is not showing any signs of recovery with yet another drop in June. Mexico's industrial production made its sharpest drop since 2009 while China's production rebounded slightly. About $600 billion of negative-yielding corporate bonds are trading in the market, most coming from European countries. Finally, the time period used to measure datasets can actually inverse ones viewpoint... in this case we are looking at China's GDP.
1. CPI and Core CPI remain subdued and at the Fed's target of 2%...
Source: Thechartstore.com, as of 7/15/19
2. Producer inflation, as measured by the PPI, is also near the Fed's target of 2%...
Source: WSJ Daily Shot, as of 7/12/19
3. Yields may follow the USD as potential rate cuts are weighed against other economic data. Any serious threat of inflation (none so far) will bring back "stagflation" fears...
Source: Thechartstore.com, as of 7/15/19
4. Have bond yields bottomed or will they continue their descent?
Source: Thechartstore.com, as of 7/15/19
5. In addition to the $13 trillion of government bonds outstanding...
Source: Deutsche Bank Research, as of 7/15/19
6. Sigh...
Source: Haver Analytics, as of 7/15/19
7. Is Europe out of the woods or is this the French (only) recent resurgence?
Source: WSJ Daily Shot, as of 7/11/19
8. Our southern neighbors are struggling...
Source: WSJ Daily Shot, as of 7/12/19
9. A mildly positive print. We always wonder about the veracity of these official figures...
Source: WSJ Daily Shot, as of 7/12/19
10. A great example how the time period of datasets can change ones viewpoint...
Source: WSJ Daily Shot, as of 7/11/19
If you haven't already, read BCM's 2019 Mid-Year Review for a deeper look at the S&P 500’s 2019 earnings multiple expansion, the U.S.- China trade war (now a trade truce), and the dovish monetary policy from the world's central banks.
Disclosure: The charts and info-graphics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are a recommendation to take any action. Individual securities mentioned may be held in client accounts.
